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The Breaking News on Break-Up Fees: A Survey of Current Break-Up Fees in § 363 Sales
Approval of bid protections in connection with the sale of significant assets pursuant to § 363 of the Bankruptcy Code has become an established practice in chapter 11 cases.[1] In nonbankruptcy transactions, bidding incentives like break-up fees and expense reimbursements are measured against a business judgment standard. In bankruptcy, however, courts have adopted a variety of tests.
Value Maximization Through the DIP Budget: A Creditor’s Perspective
Unsecured creditors are often out-of-the-money or positioned to receive a pittance of a distribution by the terms initially proposed by chapter 11 debtors and the secured lenders who consent to the proposal. This is particularly true if an unpaid portion of secured debt looms as a deficiency claim, threatening to further dilute general unsecured creditor (GUC) recoveries. Advisors of creditors — or an unsecured creditors' committee (UCC) on behalf of its constituency — must be creative and assertive, acting as a consensus-builder to extract value for GUCs.
How an Operating Model Can Prepare Your Business for the Future
Given the broad and diverse impact that the COVID-19 pandemic has had on the economy since 2020, it’s become apparent that a comprehensive and maintained operating model can position lower-middle-market companies to successfully sustain operations — especially in unprecedented circumstances. An operating model can be defined as a detailed set of projected financial statements developed with the intent to map out what future execution scenarios look like in terms of achieving a company’s overall strategic objectives.
Welcome to the Financial Advisors and Investment Banking Committee (FAIB)
ABI’s committees focus on specific areas of insolvency and provide committee members with a platform to share knowledge and ideas. Each committee publishes quarterly newsletters with articles authored by committee members, and hosts periodic webinars that showcase committee members and their practices. The committees also coordinate educational sessions for the annual ABI Winter Leadership Conference and Annual Spring Meeting. Each committee is led by a leadership team appointed by ABI.